Building tax refund without a decision
The building tax refund procedure is lengthy and inefficient. Tax authorities report problems with it. The Ministry of Finance, in the draft amendment to the CIT Act, will change these provisions.
Taxpayers, regardless of the form and type of business conducted, are obliged to pay tax on revenue from buildings that are fixed assets owned (jointly owned), located in Poland, constituting an asset related to business activity (on the basis of PIT), given away in whole or in part for use against payment on the basis of a lease, tenancy or other agreement of a similar nature. At the same time, the limit of PLN 10 million has been set as a threshold (free amount) per taxpayer, irrespective of the number and value of buildings owned by him, to which the tax does not apply.
By definition, the tax on revenue from buildings is neutral, which manifests itself in the possibility not to pay it (when it exceeds the tax calculated in accordance with the general rules), as well as to deduct it from the tax calculated in accordance with the general rules – both at the level of advance payments and in the annual settlement. In addition, the amount of building income tax not deducted in the available manner is refunded, at the request of the taxpayer, if the tax authority does not find an irregularity in the amount of the tax liability (loss) calculated in accordance with the general rules in the tax return submitted and with regard to the building income tax.
The practice of application of these provisions has revealed a problem with the procedure for refunding tax on income from buildings on request, which is due to the lack of specification in the current legislation of the verification procedure as well as the principles of refund. As a consequence, tax officials have to verify the whole taxpayer’s return each time. This means that the tax refund procedure, which by definition is supposed to be neutral, may result in the initiation of an extensive evidentiary procedure ending with the issuance of a decision, which consequently means a significant complication and prolongation of the entire process.
Hence the proposal in the draft not to impose an obligation to issue a building tax refund decision in the absence of doubts about the value of the refund.